Tokyo stocks lower in early trade as N. Korea missile risk weighs

TOKYO: Tokyo stocks dropped in early trade on Tuesday with investor sentiment weighed by media reports that Japan had detected signs of a North Korean ballistic missile launch.

The Nikkei 225 index opened flat and then drifted into negative territory as the yen strengthened.

The benchmark fell 0.57 percent, or 127.99 points, to 22,368.00 by midmorning while the broader Topix index was down 0.53 percent, or 9.35 points, at 1,767.38.

The dollar slipped to 110.96 yen early Tuesday from 111.09 yen in New York Monday afternoon.

Japanese investors tend to flock to the yen in times of uncertainty but its uptrend is negative for Japanese exporters.

Japanese media, quoting anonymous government sources, reported early Tuesday that Tokyo was on higher alert after detecting radio signals suggesting North Korean preparations for a ballistic missile launch were underway.

"North Korea might launch a missile within the next few days," Kyodo News quoted one of the sources as saying.

Pyongyang last fired a missile over Japan in mid-September.

The defence ministry would not confirm the report.

Worries over another North Korea missile test "weigh on sentiment", said Makoto Sengoku, market analyst at Tokai Tokyo Research Centre.

But Sengoglu added a North Korean missile launch "could not be a huge drag" in the longer term.

"Any drop after a missile firing would provide an opportunity to buy," he said, noting the market had moved over falls after the launches earlier this year.

Toray fell 5.52 percent to 1,043.5 yen after the synthetic fibre company said it was holding a press conference later Tuesday on production data-faking at a subsidiary.

It is the latest major Japanese firm to acknowledge problems with quality control.

SoftBank fell 0.86 percent to 9,693 yen after Bloombers reported that the technology giant and a coalition of investors would offer to buy shares in Uber Technologies at a price that would value the ride-hailing company at 30 percent less than its most recent $69 billion valuation.